IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Would Hotelling Kill the Electric Car?

  • Chakravorty, Ujjayant

    ()

    (University of Alberta, Department of Economics)

  • Leach, Andrew

    ()

    (University of Alberta School of Business)

  • Moreaux, Michel

    (Toulouse School of Economics)

In this paper, we show that the potential for endogenous technological change in alternative energy sources may alter the behaviour of resource-owning firms. When technological progress in an alternative energy source can occur through learning-by-doing, resource owners face competing incentives to extract rents from the resource and to prevent expansion of the new technology. We show that in such a context, it is not necessarily the case that scarcity-driven higher traditional energy prices over time will induce alternative energy supply as resources are exhausted. Rather, we show that as we increase the learning potential in the substitute technology, lower equilibrium energy prices prevail and there may be increased resource extraction and greenhouse gas emissions. We show that the effectiveness and the incidence of emissions reduction policies may be altered by increased potential for technological change. Our results suggest that treating finite resource rents as endogenous consequences of both technological progress and policy changes will be important for the accurate assessment of climate change policy.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.economics.ualberta.ca/~/media/economics/FacultyAndStaff/WPs/WP2010-12-Chakravorty.pdf
File Function: Full text
Download Restriction: no

Paper provided by University of Alberta, Department of Economics in its series Working Papers with number 2010-12.

as
in new window

Length: 43 pages
Date of creation: 01 Apr 2010
Date of revision:
Handle: RePEc:ris:albaec:2010_012
Contact details of provider: Postal: 8-14 HM Tory, Edmonton, Alberta, T6G 2H4
Phone: (780) 492-3406
Fax: (780) 492-3300
Web page: http://www.economics.ualberta.ca/

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Daniel J.A. Johansson & Christian Azar & Kristian Lindgren & Tobias A. Persson , 2009. "OPEC Strategies and Oil Rent in a Climate Conscious World," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 23-50.
  2. Cairns, Robert D. & Van Long, Ngo, 1991. "Rent seeking with uncertain opposition," European Economic Review, Elsevier, vol. 35(6), pages 1223-1235, August.
  3. Crabbe, P. & Long, N.V., 1988. "Entry Deterrence And Overexploitation Of The Fishery," Working Papers 8804, University of Ottawa, Department of Economics.
  4. Kelly, David L. & Kolstad, Charles D., 1999. "Bayesian learning, growth, and pollution," Journal of Economic Dynamics and Control, Elsevier, vol. 23(4), pages 491-518, February.
  5. Mason, Charles F & Polasky, Stephen, 1994. "Entry Deterrence in the Commons," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 35(2), pages 507-25, May.
  6. McDonald, Alan & Schrattenholzer, Leo, 2001. "Learning rates for energy technologies," Energy Policy, Elsevier, vol. 29(4), pages 255-261, March.
  7. David Popp, 2006. "Comparison of Climate Policies in the ENTICE-BR Model," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 163-174.
  8. James L. Smith, 2009. "World Oil: Market or Mayhem?," Journal of Economic Perspectives, American Economic Association, vol. 23(3), pages 145-64, Summer.
  9. Sinn, Hans-Werner, 2008. "Public policies against global warming: A supply side approach," Munich Reprints in Economics 19638, University of Munich, Department of Economics.
  10. Stiglitz, Joseph E, 1976. "Monopoly and the Rate of Extraction of Exhaustible Resources," American Economic Review, American Economic Association, vol. 66(4), pages 655-61, September.
  11. Andrew J. Leach, 2004. "The Climate Change Learning Curve," Cahiers de recherche 04-03, HEC Montréal, Institut d'économie appliquée.
  12. Severin Boreinstein & Andrea Shepard, 1996. "Dynamic Pricing in Retail Gasoline Markets," RAND Journal of Economics, The RAND Corporation, vol. 27(3), pages 429-451, Autumn.
  13. William D. Nordhaus, 1973. "The Allocation of Energy Resources," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 4(3), pages 529-576.
  14. Charles Mason & Stephen Polasky, 2002. "Strategic Preemption in a Common Property Resource: A Continuous Time Approach," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 23(3), pages 255-278, November.
  15. Long, Ngo Van & Sinn, Hans-Werner, 1985. "Surprise Price Shifts, Tax Changes and the Supply Behaviour of Resource Extracting Firms," Australian Economic Papers, Wiley Blackwell, vol. 24(45), pages 278-89, December.
  16. Hans-Werner Sinn, 2008. "Public policies against global warming: a supply side approach," International Tax and Public Finance, Springer, vol. 15(4), pages 360-394, August.
  17. Hubbard, R Glenn & Weiner, Robert J, 1991. "Efficient Contracting and Market Power: Evidence from the U.S. Natural Gas Industry," Journal of Law and Economics, University of Chicago Press, vol. 34(1), pages 25-67, April.
  18. Popp, David, 2004. "ENTICE: endogenous technological change in the DICE model of global warming," Journal of Environmental Economics and Management, Elsevier, vol. 48(1), pages 742-768, July.
  19. Lewis, Tracy R & Schmalensee, Richard, 1980. "On Oligopolistic Markets for Nonrenewable Natural Resources," The Quarterly Journal of Economics, MIT Press, vol. 95(3), pages 475-91, November.
  20. Christopher Harris & John Vickers, 1995. "Innovation and Natural Resources: A Dynamic Game with Uncertainty," RAND Journal of Economics, The RAND Corporation, vol. 26(3), pages 418-430, Autumn.
  21. Popp, David, 2006. "ENTICE-BR: The effects of backstop technology R&D on climate policy models," Energy Economics, Elsevier, vol. 28(2), pages 188-222, March.
  22. James L. Smith, 2005. "Inscrutable OPEC? Behavioral Tests of the Cartel Hypothesis," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 51-82.
  23. Salo, Seppo & Tahvonen, Olli, 2001. "Oligopoly equilibria in nonrenewable resource markets," Journal of Economic Dynamics and Control, Elsevier, vol. 25(5), pages 671-702, May.
  24. Chakravorty, Ujjayant & Nauges, Celine & Thomas, Alban, 2008. "Clean Air regulation and heterogeneity in US gasoline prices," Journal of Environmental Economics and Management, Elsevier, vol. 55(1), pages 106-122, January.
  25. Kolstad, Charles D & Wolak, Frank A, Jr, 1983. "Competition in Interregional Taxation: The Case of Western Coal," Journal of Political Economy, University of Chicago Press, vol. 91(3), pages 443-60, June.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ris:albaec:2010_012. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Brenda Carrier)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.